• Equity Markets: Global equities sold off aggressively yesterday as lofty tech valuations and uncertainty regarding potential Fed rate cuts prompted investors to take profits. The S&P 500 fell 1.7%, the Nasdaq dropped 2.3%, while European stocks declined 0.6%. In the U.S., ten of eleven sectors were negative, with only 25.8% of stocks higher on the day. Energy (+0.3%) was the sole positive sector, while Consumer Discretionary (-2.7%) and Information Technology (-2.4%) were the weakest performers. Robinhood Markets fell 8.6% after failing in its bid to block a Massachusetts state gambling law. On the positive side, Cisco shares rose 4.6% after reporting solid earnings supported by AI-driven demand. In Europe, ten of eleven sectors were also negative, with 38.5% of stocks higher on the day. Real Estate (+0.2%) was the only positive sector, while Industrials (-1.7%) and Consumer Discretionary (-0.8%) were the weakest. 3i Group (-17.4%), the private equity firm, experienced a sharp decline despite posting “excellent” results, after issuing a cautious outlook.
• Macro: In macro news, following the end of the U.S. government shutdown, it was announced that President Trump is readying substantial tariff cuts aimed at addressing high food prices. In the UK, preliminary Q3 GDP came in weaker than expected at 0.1% (est. 0.2%), taking the YoY rate to 1.3% (est. 1.4%). Following the miss, confidence is growing that Chancellor Rachel Reeves may consider a U-turn on raising headline tax rates in the upcoming budget. UK Industrial Production for September fell 2.0% (est. -0.2%), while Manufacturing Production dropped 1.7% (est. -0.3%). Irish CPI for October came in at 2.8%. From the Fed, Musalem said that officials should move more cautiously on rates, given inflation remains above target. Hammack noted that policy should stay “somewhat restrictive.”
• Economic releases today include U.S. Retail Sales for October will be published today, with survey estimates at -0.2%. At the same time, PPI Final Demand for October will also be released, with estimates of 0.2% MoM.
• Stocks: Allianz: (Neutral TP €339, c. 6% downside): Update following release of strong Q3 results, with PT increase to €339. Ryanair: (Overweight TP €29.50 c. 9% Upside): Details of a positive meeting with the company following Q2 results. Supermarket Income REIT: (Overweight PT 90p 12% Upside): Brief note on 20 store acquisition from Carrefour in France.
• Debt: Treasuries fell, and traders pulled back on bets that the Federal Reserve is set to bring down interest rates next month as policymakers cautioned against further reductions.

Opportunities this week:

• On Friday, Fedex reported poor Q1 2025 results. On balance, the results show a tough start to the year, with revenue down 0.5% and adjusted EPS at $3.6 down 24.1%. Despite the poor Q1 results and slightly lower guidance, we reiterate our Buy rating on the stock with PT $330 (29.5% upside).
• In early August, PayPal launched Fastlane, a new accelerated guest checkout solution, for U.S. merchants, making it available on its Braintree and PPCP (PayPal Complete Payments) platforms, as well as through platform partners including Salesforce, Adobe, BigCommerce, and Bold Commerce. We reiterate our Buy recommendation with a PT of $95, (23% upside).
• Last month, along with lacklustre H1 earnings results, Datalex announced that it was proceeding with a Firm Placing (€17m) and Placing and Open Offer (€8m) to raise €25m to repay €15m of loans from an affiliate of its largest shareholder IIU nominees, and to provide sufficient short-term working capital for the business. The Board also announced that it planned to raise further equity capital in the first half of 2025, which they estimated to be a minimum of €5m additional. We recommend a Hold with a PT of 32c (-16% downside).